Apple agrees to pay huge amount to Ireland

Apple agrees to pay huge amount to Ireland

Apple caught the headlines in the business segment after it successfully reached an agreement with the European Union to start depositing the €13 billion in back taxes which they were ordered to pay Ireland last year, following its trademark decision to crackdown on tax shelter policies and profit off-shoring.

In spite of the ruling been issued more than a year ago in the later part of October 2016, Ireland has resisted collecting the money. The country strategically used low tax rates to increase domestic investments from foreign companies. But the practice has resulted in companies like Apple effectively to use Ireland as a tax shelter by paying rates of 0.005 percent on all European revenues in ten years from 2003 and 2014 with the help of subsidiaries and shell companies designed to collect and maintain offshore revenue.

Apple has challenged this characterization of its tax schemes much before. CEO of the company Tim Cook called the EU Commissioner’s ruling a total political crap.

Due to the lack of action taken by the Ireland, the European Union referred the government to the European Court of Justice which is also the highest court of the bloc’s governing body, to deal with the tax matters. Both Apple and the government of Ireland have appealed the ruling, with the Apple executives expect to recoup the money if successful.